BISMARCK, N.D. (AP) — North Dakota officials voted to repurpose $221 million in federal coronavirus aid to various state agencies, including a $16-million grant to oil companies in support of the fracking process.
The North Dakota Emergency Commission approved the plan Friday, the Bismarck Tribune reported.
The money comes from the $1.25 billion awarded to the state through the Coronavirus Relief Fund established by the federal CARES Act.
The Oil and Gas Division plans to award the $16-million grant to oil companies for acquiring and disposing of water used in the hydraulic fracturing process, in which water, sand and chemicals are injected underground to crack rock and release oil.
State Mineral Resources Director Lynn Helms said the grant would help create jobs and help stabilize oil production by leading to an increase in well drilling. Officials said higher oil production would stabilize the state’s revenue.
Helms added that oil companies have been hit hard by the price drop resulting from the pandemic, leading to slow work in the state’s oil fields.
The Sierra Club, however, called it “totally inappropriate” to use money the state received under the coronavirus rescue package for fracking.
Democratic state Sen. Tim Mathern, from Fargo, previously said the proposal was “an incredible misuse of tax dollars that could help small businesses or independent contractors struggling to stay open or working families barely able to afford rent.”
The commission also plans to give $33 million to the education department, $29 million to the Department of Commerce’s economic resiliency grants and $61 million to counties and cities to help with law enforcement costs and other needs.
Proposals from the state agencies will go to the legislative Budget Section for final approval. Lawmakers are scheduled to meet Wednesday.